proximity a next generation connection Proximity Research Report Rhapsody Proposal for Mobile Subscription By Michael LoPinto Spring 2010 Table of Contents Executive Summary 1 Introduction: Rhapsody Music Subscription vs. Illegal Downloading 2 The Mobile Subscription 3 Rhapsody 4 Targeting Gen-Y 5 Recommendation 6 Attachment 1: Mobile Subscription 7 Attachment 2: Easy to use application 8 References 9 Executive Summary The music industry has been anticipating the decline in digital music sales for the last decade. A more profitable business strategy needs to be developed to make profit for the artists as well as the music labels behind them. Rhapsody has been in the music subscription scene for the past decade. However, in recent years they have fallen dramatically from where they once stood. With sites such as Limewire, and “Itunes,” the ability for Rhapsody to gain any ground has taken a dramatic down in the past few years. This report details what a terrible business strategy it would be to advertise on a music website that uses the subscription model.
Introduction: Rhapsody Music Subscription vs. Illegal Downloading Illegal Downloading has shown a gradual increase since January 08 Figure 1. Growth in Download Requests Source: http://blogs.thestage.co.uk/tvtoday/2008/05/20/iplayer_graph_1.jpg Rhapsody needs to stop resisting and accept that illegal downloading is a fact of 21st-century. Pay per song music services continue to lower song prices, but even when the prices are approaching near zero, people still continue to pirate music. 95% of music downloads in 2008 were illegal. A New national survey conducted for the Business Software Alliance found that two thirds of 1,062 college and university students said they have no ethical reservations about illegally downloading digital copyrighted files from the internet for free. The survey released also stated that 52 percent of the college-age respondents believe it is permissible to pursue such downloading of software, music, and movies at school or at the workplace. The Rhapsody Mobile Subscription Rhapsody’s revenue comes from: · Subscribers to the music service and iPhone application. · Advertising such as publications in magazines and websites. The primary competition that would pose a threat for Rhapsody is iTunes, Napster, LimeWire, and Pandora. Rhapsody has seen its music subscriber base decline steadily, from 800,000 at the beginning of 2009 to 700,000 at the end of the third quarter. To once again rise to the top, Rhapsody has formed a partnership with Apple. The iPhone now features a Rhapsody application, which users can sign up for. Targeting Gen-Y With the growth of Smart phones, I believe the subscription model needs to go mobile. Gen-Y is notorious for obsessive cellular phone behavior. Advertising and creating cell phone applications are all ways to promote an artist’s songs. The mobile subscription can allow for streaming videos and music that appeal to all audiences. Pandora, a blackberry application, introduces new music to a listener by allowing the consumer to choose genre of music he or she wants to listen to. Another benefit to the mobile subscription that appeals to Gen-Y is the consumer does not have to give out his credit card information to a music service. The consumer just charges the expense to his or her cell phone. Recommendation Proximity focus group results indicate that Gen-Y no longer traffics to pay per song music sites as much as we are lead to believe. Gen-Y does, however, get most of their music illegal download web sites. This report details how advertising on Rhapsody music is an investment that must be carefully considered before undertaking. If our clients can understand Rhapsody’s history and how they compete in today’s market, then they can understand many other subscriptions music services. This knowledge will allow clients to smartly invest, or not invest, their money in subscription music services through an increased knowledge of one of the biggest such sites in the industry. Attachment 1: Mobile Subscription Downloadable and easy to use mobile subscription
::Desktop:vcastrhap.jpg
Attachment 2: Easy to use application Easy to navigate application for Gen- Y
a next generation connection
Proximity Research Report
Rhapsody
Proposal for Mobile Subscription
By Michael LoPinto
Spring 2010
Table of Contents
Executive Summary 1
Introduction: Rhapsody Music Subscription vs. Illegal Downloading 2
The Mobile Subscription 3
Rhapsody 4
Targeting Gen-Y 5
Recommendation 6
Attachment 1: Mobile Subscription 7 Attachment 2: Easy to use application 8
References 9
Executive Summary
The music industry has been anticipating the decline in digital music sales for the last decade. A more profitable business strategy needs to be developed to make profit for the artists as well as the music labels behind them. Rhapsody has been in the music subscription scene for the past decade. However, in recent years they have fallen dramatically from where they once stood. With sites such as Limewire, and “Itunes,” the ability for Rhapsody to gain any ground has taken a dramatic down in the past few years. This report details what a terrible business strategy it would be to advertise on a music website that uses the subscription model.
Introduction: Rhapsody Music Subscription vs. Illegal Downloading
Illegal Downloading has shown a gradual increase since January 08
Figure 1. Growth in Download Requests
Source: http://blogs.thestage.co.uk/tvtoday/2008/05/20/iplayer_graph_1.jpg
Rhapsody needs to stop resisting and accept that illegal downloading is a fact of 21st-century. Pay per song music services continue to lower song prices, but even when the prices are approaching near zero, people still continue to pirate music. 95% of music downloads in 2008 were illegal.
A New national survey conducted for the Business Software Alliance found that two thirds of 1,062 college and university students said they have no ethical reservations about illegally downloading digital copyrighted files from the internet for free. The survey released also stated that 52 percent of the college-age respondents believe it is permissible to pursue such downloading of software, music, and movies at school or at the workplace.
The Rhapsody Mobile Subscription
Rhapsody’s revenue comes from:
· Subscribers to the music service and iPhone application.
· Advertising such as publications in magazines and websites.
The primary competition that would pose a threat for Rhapsody is iTunes, Napster, LimeWire, and Pandora. Rhapsody has seen its music subscriber base decline steadily, from 800,000 at the beginning of 2009 to 700,000 at the end of the third quarter. To once again rise to the top, Rhapsody has formed a partnership with Apple. The iPhone now features a Rhapsody application, which users can sign up for.
Targeting Gen-Y
With the growth of Smart phones, I believe the subscription model needs to go mobile. Gen-Y is notorious for obsessive cellular phone behavior. Advertising and creating cell phone applications are all ways to promote an artist’s songs. The mobile subscription can allow for streaming videos and music that appeal to all audiences. Pandora, a blackberry application, introduces new music to a listener by allowing the consumer to choose genre of music he or she wants to listen to. Another benefit to the mobile subscription that appeals to Gen-Y is the consumer does not have to give out his credit card information to a music service. The consumer just charges the expense to his or her cell phone.
Recommendation
Proximity focus group results indicate that Gen-Y no longer traffics to pay per song music sites as much as we are lead to believe. Gen-Y does, however, get most of their music illegal download web sites.
This report details how advertising on Rhapsody music is an investment that must be carefully considered before undertaking. If our clients can understand Rhapsody’s history and how they compete in today’s market, then they can understand many other subscriptions music services. This knowledge will allow clients to smartly invest, or not invest, their money in subscription music services through an increased knowledge of one of the biggest such sites in the industry.
Attachment 1: Mobile Subscription
Downloadable and easy to use mobile subscription
Attachment 2: Easy to use application
Easy to navigate application for Gen- Y
References
-Bell, Donald. "Rhapsody tries music subscription iPhone app". Cnet. August 24, 2009 <http://reviews.cnet.com/8301-12519_7-10315986-49.html>
-Bonanos, Paul. (February 11, 2010). Newly Independent Rhapsody’s Subsriber Base Still Shrinking. Retrieved February 28, 2010 from http://gigaom.com/2010/02/11/newly-independent-rhapsodys-subscriber-base-still-shrinking/
-Hansell, Saul. (June 30, 2008). Rhapsody Runs Hard Just To Stay in Place. Retrieved February 28, 2010 from http://bits.blogs.nytimes.com/2008/06/30/rhapsody-runs-hard-just-to-stay-in-place
- Goneslaves, Antone. "Rhapsody iPad App Stores Music Offline ". 4/27/10 <http://www.informationweek.com/news/hardware/handheld/showArticle.jhtml?articleID=224600541>.